Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<div><p>The <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> is the flagship index of the Bombay Stock Exchange (BSE). The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 17 December.</p></div><div>
<p>The December review uses the market cap and turnover data from 1 May to 31 October to determine the stocks to be included and excluded from the index, and the announcement of the changes is done 4 weeks before the rebalance effective date.</p>
<p>With 6 days to go in the review period, we see <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> as a high probability index addition. <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> is the lowest ranked index constituent and is a likely deletion from the index.</p>
<p>There is a (slim) possibility of <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a> being deleted from the index if it fails the annualised traded value test. As it stands, it is touch and go for the stock.</p>
<p>Passive trackers will need to buy over 2 days of ADV on <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> and sell over 3.5 days of ADV on <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a>. If <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a> is deleted instead, passive trackers will need to sell 7 days of ADV on the stock.</p>
<p>In terms of delivery volumes, the impact is much larger with passive trackers needing to buy 8.5 days on <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a>, while selling either 8.8 days on <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd (BJAUT IN)</a> or 13 days on <a href="https://www.smartkarma.com/entities/nestle-india-ltd" target="_blank" data-smartkarma-citation="entities:13101:1" rel="noopener">Nestle India (NEST IN)</a>.</p>
</div>

The S&amp;P BSE SENSEX Index (SENSEX INDEX) is the flagship index of the Bombay Stock Exchange (BSE). The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 17 December.
The December review uses the market cap and turnover data from 1 May to 31 October to determine the stocks to be included and excluded from the index, and the announcement of the changes is done 4 weeks before the rebalance effective date.
With 6 days to go in the review period, we see Wipro Ltd (WPRO IN) as a high probability index addition. Bajaj Auto Ltd (BJAUT IN) is the lowest ranked index constituent and is a likely deletion from the index.
There is a (slim) possibility of Nestle India (NEST IN) being deleted from the index if it fails the annualised traded value test. As it stands, it is touch and go for the stock.
Passive trackers will need to buy over 2 days of ADV on Wipro Ltd (WPRO IN) and sell over 3.5 days of ADV on Bajaj Auto Ltd (BJAUT IN). If Nestle India (NEST IN) is deleted instead, passive trackers will need to sell 7 days of ADV on the stock.
In terms of delivery volumes, the impact is much larger with passive trackers needing to buy 8.5 days on Wipro Ltd (WPRO IN), while selling either 8.8 days on Bajaj Auto Ltd (BJAUT IN) or 13 days on Nestle India (NEST IN).


Sensex Dec 2021 Index Rebalance Preview: Wipro Should Be Added, Deletion Has An Interesting Option

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

External broker reports(aggregated public sources)

Equity Bottom-Up

<p><strong>About the stock:</strong> Wipro is an IT, consulting &amp; BPO catering to BFSI, health, consumer, energy &amp; utility, technology and communication.</p><ul><li>With 190000 employees, it serves clients across six continents</li><li>Consistent payout (~70%), healthy OCF to EBITDA ratio of ~89%</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

About the stock: Wipro is an IT, consulting &amp; BPO catering to BFSI, health, consumer, energy &amp; utility, technology and communication.With 190000 employees, it serves clients across six continentsConsistent payout (~70%), healthy OCF to EBITDA ratio of ~89%Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), Axis Direct

Axis Direct

<p>We recommend a BUY rating on the stock and assign a 28x P/E multiple to its FY24E earnings of Rs 27.7/share to arrive at a TP of Rs 655/share, implying an upside of 15% from CMP.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We recommend a BUY rating on the stock and assign a 28x P/E multiple to its FY24E earnings of Rs 27.7/share to arrive at a TP of Rs 655/share, implying an upside of 15% from CMP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Wipro: Strong Performance, Robust Outlook Backed By Efficient Execution

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>WPRO reported a strong (8.1% QoQ CC) revenue growth in IT Services in 2QFY22, ahead of our estimate of 6.9%. Organic growth (excluding Capco) of 4.5% QoQ also came in ahead of our estimate. The management highlighted...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

WPRO reported a strong (8.1% QoQ CC) revenue growth in IT Services in 2QFY22, ahead of our estimate of 6.9%. Organic growth (excluding Capco) of 4.5% QoQ also came in ahead of our estimate. The management highlighted...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Solid 2QFY22 beat and in line 3Q guidance

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

<p>Mindtree: Mindtree (MTCL) delivered an exceptional quarter with double-digit QoQ growth and beat on margins despite wage hikes and supply side issues. The dependence on the top account is coming down and growth was broad-based across verticals/geographies/service lines. Mindtree's growth momentum will continue, supported by non-T1 accounts (+17.6% QoQ), customer success (+21.8% QoQ) and investments in Europe (manufacturing). Its sustainable structural improvement is validated by (1) the uptick in Q2 deal TCV at &gt;USD 300mn and lower dependence on non-T1 account, (2) improved cross-sell and addition of strategic logos (seven in Q2), and (3) healthy growth in the travel vertical, supported by core modernisation.</p>
<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Mindtree: Mindtree (MTCL) delivered an exceptional quarter with double-digit QoQ growth and beat on margins despite wage hikes and supply side issues. The dependence on the top account is coming down and growth was broad-based across verticals/geographies/service lines. Mindtree's growth momentum will continue, supported by non-T1 accounts (+17.6% QoQ), customer success (+21.8% QoQ) and investments in Europe (manufacturing). Its sustainable structural improvement is validated by (1) the uptick in Q2 deal TCV at &gt;USD 300mn and lower dependence on non-T1 account, (2) improved cross-sell and addition of strategic logos (seven in Q2), and (3) healthy growth in the travel vertical, supported by core modernisation.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Infosys, Wipro, Mindtree

India

Wipro Limited specializes in IT and computer related technologies. The Group's services encompass a number of areas, including software architecture, business intelligence systems, e-commerce, data warehousing, Internet access devices, network management, system administration, messaging systems, IT consulting and design. Wipro also has a presence in niche markets of consumer products.

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Wipro Ltd Adr (WIT US)

Sensex Dec 2021 Index Rebalance Preview: Wipro Should Be Added, Deletion Has An Interesting Option

Near the end of the review period, we see Wipro as a high probability add. Bajaj Auto could be deleted as the lowest ranked constituent, but Nestle...

Brian Freitas

Wipro: Strong Q2 Numbers

Wipro is an IT, consulting & BPO catering to BFSI, health, consumer, energy & utility, technology and communication. With 190000 employees, it...

ICICI Securities Limited

Wipro: Strong Performance, Robust Outlook Backed By Efficient Execution

We recommend a BUY rating on the stock and assign a 28x P/E multiple to its FY24E earnings of Rs 27.7/share to arrive at a TP of Rs 655/share,...

Axis Direct

Solid 2QFY22 beat and in line 3Q guidance

WPRO reported a strong (8.1% QoQ CC) revenue growth in IT Services in 2QFY22, ahead of our estimate of 6.9%. Organic growth (excluding Capco) of...

Motilal Oswal

HSIE Results Daily: Infosys, Wipro, Mindtree

Mindtree: Mindtree (MTCL) delivered an exceptional quarter with double-digit QoQ growth and beat on margins despite wage hikes and supply side...

HDFC Securities

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